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Primer on Medicare Advantage (Part C) Audits

Under the Medicare Part C or Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) contract with Medicare Advantage Organizations (MAOs), typically private insurance companies, that administer MA health plans to Medicare beneficiaries as an alternative to traditional Medicare. Enrollment in MA plan has steadily grown in the last several years, and currently roughly half of all Medicare beneficiaries are enrolled in an MA plan. Further, federal authorities recently accused MAOs of overcharging the Medicare program by millions of dollars. Increased scrutiny of MAOs could lead to more stringent review of claims submitted by providers and MAOs may take greater action against providers through overbearing audits in an effort to offset losses. In any event, providers can likely expect MA plans to increase their audit activity of healthcare providers.

Some of the most popular MA health plans are administered by Humana, UnitedHealthcare, Aetna, BlueCross BlueShield, and Cigna. Audits by MA plans differ from audits conducted by Medicare or those conducted pursuant to commercial insurance plans, but MA plans are governed primarily by the provider’s participation agreement with the MA plan. As part of a provider’s participation contract, MA plans generally have the right to audit a provider’s claims. MA plans may audit providers for a number of reasons, such as suspicions of alleged upcoding, overutilization, irregularities, or fraud and abuse. A provider’s contract with the MA plan will generally prescribe a limited lookback period that restricts how far back in time the plan can review claims for audit purposes. The contract will generally also prescribe the policies and procedures which the plan must follow when conducting audits. However, state laws may affect the extent to which MA plans can audit providers by providing for conflicting maximum lookback periods or imposing other limitations. Notably, health plans may use these audits to retroactively deny a number of claims, which may then be extrapolated over several years of service, resulting in significant alleged overpayments against the provider. This may further result in serious actions such as recoupment, mandatory prior authorization, or even removal from the MA plan’s network of providers. Additionally, certain adverse actions imposed by MA plans may serve as the basis for even further consequences from CMS, such as suspension or termination from the Medicare program. Given the rapid growth of MA plans, providers should be aware of their rights and responsibilities regarding the most common MA plan audits, as well as be proactive in their compliance efforts.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare Advantage audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or

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